Toledo Pledges ‘No Surprises’ for Foreign Metal Miners in Peru

Peruvian presidential candidate Alejandro Toledo said there will be “no surprises” for foreign mining companies if he wins back his job in April elections.

Toledo, who was tied for second-place in a poll taken last month, is pledging to quicken the pace of judicial reform, partly in exchange for international miners improving their compliance with the country’s environmental laws.

“If elected, I’m going to call them all to the table and we’re going to establish the rules of the game and once we agree to that, we’re going to have no surprises,” Toledo, 64, said yesterday in an interview in Vancouver ahead of meetings with executives of Canada’s largest mining companies.

Peru, the world’s largest silver producer and second- largest producer of copper, has lined up $41 billion in mining and energy investment commitments over the next decade. South America’s sixth-biggest economy is on pace to expand as much as 9 percent this year and 7 percent in 2011, the fastest growth rate in the region, according to the Andean country’s Finance Ministry.

As Peru’s president from 2001 to 2006, Toledo oversaw the startup of the $2.2 billion Antamina mine and Toronto-based Barrick Gold Corp.’s $340 million Alto Chicama gold mine, while a Hunt Oil Co.-led group started up the $1.6 billion Camisea gas fields project. Barrick is the world’s largest gold producer.

Sustainable Growth

New investments in resource extraction include a $1.3 billion expansion of Antamina, the world’s largest combined copper-and-zinc mine, by a group of companies including Vancouver-based Teck Resources Ltd., Canada’s largest diversified mining company.

The country relies on exports of raw materials such as copper, gold and natural gas for about 65 percent of annual government revenue, Toledo said.

Toledo said he is in Canada to assure the mining industry that he is committed to strengthening the country’s “fragile democratic institutions” to both protect and attract foreign investment and to prevent social unrest.

“When you don’t have a just judicial system, the poor get poorer, the rich get richer,” Toledo said. “It’s not a very adequate climate to attract the capital investment that is needed to provide sustainability of the growth levels that we have now.”

Exploration, Elections

Talisman Energy Inc., a petroleum producer based in Calgary, and more than 200 junior mining exploration companies, mostly Canadian, are searching for reserves of crude oil, natural gas and other resources across the country.

Pan American Silver Corp. and Fortuna Silver Mines Inc., based in Vancouver, also operate mines in Peru.

Lima Mayor Luis Castaneda and Keiko Fujimori, a congresswoman and daughter of jailed former President Alberto Fujimori, are among candidates competing with Toledo to succeed President Alan Garcia

Toledo was tied for second place with 20 percent in an Ipsos Apoyo poll published Nov. 21. The poll of 1,200 people in 17 Peruvian cities from Nov. 17-19 had a margin of error of 4.4 percentage points for Lima and 2.8 percentage points overall.

Toledo said he has no plans, if elected, to pardon Fujimori, who was sentenced to 25 years in jail in 2009 for human rights violations committed by government-linked death squads.

“I don’t like to live in the past,” he said. “There will be trouble if Peru goes back to its past.”

To contact the reporters on this story: Christopher Donville in Vancouver at cjdonville@bloomberg.net; Alexander Emery in Lima at aemery1@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net.

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